The highest form of flattery is imitation, as it has been known for a long time. The rapid development of technology, shortening the production chains and product life cycle, new distribution models developed by the world’s largest corporations, the progressive shift of retail trade to the web, changes in consumer habits and the ever-increasing dominance of large internet platforms, meant that this sentence should now read: copying is the simplest form of theft.
Radosław Krzycki , COO Skey Network
One of the top current reports on this topic, the OECD report about world trade and counterfeit goods shows that in 2019, counterfeit products accounted 3.3% of global commerce. This was rapidly growing according to the OECD.
Even higher was the proportion of fake goods in the European Union, which accounted for 6.8%. This number doesn’t include fake goods produced in the EU and distributed via the Internet. It is likely that it is much higher.
According to the estimates of the ICC – the International Chamber of Commerce, the value of the trade in counterfeit products will increase to almost one trillion dollars in 2022, and the number of jobs lost will be between 4.2 and 5.4 million.
It is more difficult to predict the amount of counterfeit digital products, which grows in proportion to global traffic and the importance of the network. The loss of music, films, series, and software piracy will reach $ 854 Billion in 2022.
What can you do to stay true and authentic in an increasingly digital and automated world? How do you move quality, brand image and value from the tangible world into the digital?
The answer is provided by blockchain technology and its latest version – NFT – (non-fungible token). In short – it is a unique, inimitable piece of information stored in the blockchain data chain, constituting a kind of digital “tag” and a certificate that guarantees the originality of a non-physical product or work.
NFT tokens can be used to confirm that we purchased the right product from the legal source.
The real world and the digital world are increasingly mixed today, which is why NFTs blend both.
Let’s take an example product – a bag from a reputable manufacturer X. You get the real thing when you purchase it at a shop in a mall.
When a client purchases a physical item, he receives an additional code using NFT technology (e.g. QR), which gives him the right to have an equivalent of an exemplary bag in the digital world, with all the advantages – prestige, a certificate of originality, a value carrier or the right to resale.
Are there any benefits to this approach for businesses?
This is not just a great way to fight counterfeiting and piracy but also the first step towards the digital transformation and smooth transition into the metaverse. It can help gain new markets, and enter dynamically expanding sales channels. Another advantage of this approach is the ability to project a company image that is modern, adaptable and appealing for the younger, more technologically-conscious consumer segments.
It is worth emphasizing – this is not an investment dedicated only to premium brands, as evidenced by the movements of companies such as Nike, which bought the creator of NFTs and shoes existing only in virtual space. This solution will soon be available for mass consumption. In the future, each product’s authenticity will be verified online by scanning the code/label. Not only will they be valuable (many people would love to own shoes that look brand new, last forever), but they can also be an income source for the creators. An example is the popular “skins” in computer games, that is, graphical modifications of the appearance of a character or part of their outfit. Recently, one of these skins was sold in CS-GO for $150,000.
How will it change in the future? NFT sales exploded from $1.3 billion to $ 10.7 million in Q2 2021. The vast majority of sales were made by NFTs from the “cheap” segment, ie those with prices between 0-100 and 100-1000 dollars. The conclusion is that this solution works for all companies, and not just those in the premium category.
You can see that the entry level is quite low while the growth potential very high. In entering this new, lucrative market, the key is to choose the right technology – the provider and type of blockchain on which we want to base our digital products. This field is still very fragmented.
To be successful, you need to act boldly, decisively, and most importantly – quickly, and grab the bull by the horns. Only more and more often it turns out that the bull does not have to be material …